Madoff victims will get another $695 million from U.S. fund
Thousands of victims of Bernard Madoff’s Ponzi scheme are due to get checks totaling $695 million from a U.S. Justice Department fund created through settlements with some of the con man’s oldest customers and his bank, JPMorgan Chase & Co.
The payout, to 27,000 victims worldwide, is the third distribution from the $4 billion fund, the department said Thursday in a statement. The government-led recovery is separate from a $13.3 billion fund overseen by a trustee who’s been liquidating Madoff’s firm in court for the past 10 years to compensate people he duped.
Madoff’s investors lost a total of $19 billion in principal and more than $40 billion in fake profit when his securities firm collapsed in December 2008. Federal prosecutors called it the biggest Ponzi scheme in history. Madoff, 80, was sentenced to 150 years behind bars after pleading guilty in 2009.
“While today’s distribution of funds is indeed significant in scope, we understand no amount of money could ever restore the damage done by Madoff as a result of his selfish behavior and unforgivable financial crimes,” FBI Assistant Director William Sweeney said in a statement.
The Justice Department accepted claims from people who invested indirectly with Madoff through hedge funds or money managers and were therefore barred under federal bankruptcy law from filing claims with the trustee overseeing the liquidation, Irving Picard. Picard is still recouping money for victims by suing investors who took out more money from their accounts than they put in.
The compensation fund was created in 2012 to repay thousands of Madoff’s victims after the U.S. seized $2.4 billion from the estate of one of his biggest investors, the late Jeffry Picower. Some of that money went to the government compensation fund, which grew by $1.7 billion following a 2014 forfeiture deal with Madoff’s bank, JPMorgan Chase. The bank was accused of turning a blind eye to the scam.